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Pre-emptive strike against real estate tax on November ballot

Tuesday, October 19, 2010 | 6:05 p.m. CDT

JEFFERSON CITY — Missouri property owners don't pay a tax when land changes hands — and if Amendment 3 on the November ballot passes, it will stay that way.

The Missouri Association of Realtors is behind the initiative to prevent a real estate transfer tax from coming to Missouri. Voters will decide Nov. 2 if the state constitution should be amended to pre-emptively block state government from instituting the tax.

All eight states surrounding Missouri have a transfer tax. Tennessee's tax is the highest at 37 cents for every $100 of the selling price. That's $370 for a $100,000 home.

"In this economy when people are losing their jobs — many people have suffered a loss in income — to have an additional tax on a piece of property could certainly affect somebody's ability to own their home and achieve the American dream," said Elizabeth Mendenhall, president of the Missouri Association of Realtors.

Real estate transfer taxes are assessed on property when ownership is transferred between parties, according to the group's website. It applies to any change in ownership, whether the property is passed from a buyer to seller, contractor to developer or family member to an heir.

The tax can become expensive very quickly, said Sharon Keating, co-owner of RE/MAX Jefferson City, who supports the amendment.

"Your average home owner who's not a very wealthy person — most of our homeowners will be low- to middle-income people — they're struggling to make their payments and pay their taxes as it is," Keating said.

Missouri is one of 13 states without a transfer tax, Mendenhall said. Although no plans for such a tax have materialized yet in the state legislature, proponents of the amendment want to ensure they never do.

"It's a slippery slope," Keating said. "We just don't want it to get started in Missouri, have it start low and then continue to move up as government needs more money to function."

Leaving the option for the tax open provides another way to generate revenue for the state, but Keating said she believes the tax would do more harm than good for property owners.

"It would be a devastating blow to an already weak real estate economy," Keating said.

Rep. Mike Leara, R-St. Louis County, said there is general support for the anti-tax amendment in the Missouri legislature.

"There are already transfer fees and title registration and things of that nature," Leara said. "Any additional fee is totally unnecessary."

The Realtors group continues to advocate for the initiative with its "Vote Yes to Stop Double Taxation" campaign. About $2 million has been given to support the ballot measure.

There is no organized opposition, although it nearly didn't make the ballot because the petition's signatures were under contention. In September, the Secretary of State's office dropped its appeal of a judge's ruling that allowed the initiative to go to voters.


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